ClubsNSW chief executive Anthony Ball says
James Packer
’s Sydney casino will be aimed at Chinese punters and will not target club customers, despite analysis that about half of the venue’s earnings could come from local punters.

Mr Ball, who represents the state’s 1200 registered clubs, said he was not worried about the opening of the $1.3 billion
Crown Resorts
casino and hotel in 2019. The project received parliamentary approval in November, but must still jump through planning and regulatory hoops.

“We’ve looked closely at the conditions around entry and operation [of Crown Sydney]," Mr Ball said. “From what we can tell it looks as though it will be relatively inaccessible by your average Sydney punter. It appears to be designed squarely for the Chinese punter."

There are 19 clubs in the central business district, on the doorstep of the Barangaroo waterfront development precinct where Crown Sydney will be located, with 425 clubs in the wider metropolitan area.

Mr Ball said the establishment of Star City, now The Star owned by
Echo Entertainment Group
, in Pyrmont in 1995 had eaten into the gambling revenues of nearby clubs.

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“When [The Star] opened its doors in the late 90s it had a devastating effect on clubs within a five-kilometre radius and to this day we’re living with a very aggressive operator who has stated publicly that they’re after people in the suburbs and they’re club customers," he said.

But Mr Ball said he did not expect Crown to target club customers. He said Mr Packer and NSW Premier
Barry O’Farrell
have said the casino would be a VIP-only facility and the lobby group would “take them at their word."

Crown’s luxury hotel and members-only casino is a tourism play to attract Asian visitors, especially wealthy Chinese punters. But Crown will also be able to admit locals who become members, subject to a 24-hour cooling off period.

Immediate membership will be offered to punters who are already members of a VIP gambling venue, such as The Star’s Sovereign Room. Members’ guests, as well as guests of Crown’s six star hotel will also be offered entry without the cooling off requirement.

“I think that the analysts are probably pretty right when they say VIP and premium local gaming are going to be similar contributors to the EBITDA of the property once the property is open," he said in July.

Citi analyst Michael Goltsman said unless Crown was taking market share from competitors, its business had to stimulate growth in overall gambling expenditure from locals. “In terms of where will the customers come from, you can probably argue some of them might come from clubs but I think Echo is certainly the bigger target for Crown," he said.

Mr Ball said it would be “silly" to assume that there would be no transfer of club punters to Crown, but said the lack of pokies at Crown would stem the flow.

Clubs control 75,000 of the 99,000 poker machines in NSW. The Star has 1,500 machines.

Crown is prohibited from operating pokies at its Sydney casino, but it has an unlimited cap on multi-terminal gaming machines (MTGM).

Clubs also operate MTGMs, which offer electronic versions of games like blackjack and roulette. Large clubs can not have more than 15 per cent of their electronic gaming licences as MTGM seats, which means a club with 800 pokies licences can offer 120 MTGM seats or less.

The O’Farrell kept an election promise to ClubsNSW by passing legislation in May to lift the cap on MTGMs in smaller clubs, which the government said would promote the clubs’ “viability".

Mr Ball said the change was enacted to remove an “anomaly". “Not a single extra MTGM seat has been installed as a result of that legislation," he said.

Industry sources said MTGMs are becoming increasingly important for larger clubs and the lobby group has been pushing for a lifting of the cap.

Mr Ball said revenue from MTGMs was a stable but small contributor to club revenue. There are 2,304 MTGMs operating in NSW clubs. Echo also has an unlimited cap on MTGMs and currently has 523 operating at Pyrmont.